The U.S. Treasury Department and Coin Center have formally concluded their legal dispute regarding sanctions imposed on the Tornado Cash cryptocurrency mixer.
The agreement ends litigation that began after the Office of Foreign Assets Control (OFAC) blacklisted the Ethereum-based privacy tool. This marks a notable resolution following OFAC’s decision to lift the sanctions on Tornado Cash last year.
The case underscored the significant regulatory tension between enforcing anti-money laundering (AML) requirements and preserving the legitimate privacy features inherent in blockchain and decentralized technologies. Coin Center, a prominent advocacy group for cryptocurrency rights, initiated the challenge against the sanctions.
Following the settlement, Coin Center’s Executive Director emphasized the decision’s critical implications for the future development and acceptance of privacy-enhancing technologies within cryptocurrency ecosystems.
The OFAC sanctions imposed in 2022 represented a landmark action, being one of the first major U.S. regulatory crackdowns on a decentralized protocol. Those sanctions aimed to disrupt the alleged use of Tornado Cash in laundering proceeds from significant cybercrimes.